Strong quarter masks transient benefits; margins face headwinds

Revenue ₹4,551.6 Cr (+21.3% YoY), PAT ₹883.5 Cr (+30.3%), EBITDA margin 26.6%

Delivered numbers confirm, but headline growth 22.2% heavily price-driven (~10% weighted price increase)

Demand holding but UVG 12.2% vs prior 15% suggests some moderation; management acknowledges possible channel pre-buying

Actual 26.6% OPM (vs reported 26.4% EBITDA standalone). Management explicit: ~100 bps benefit from low-cost inventory will reverse Q2

Reaffirmed, not raised. Management expects Q1's 26.4% to moderate 'a little bit' back into band

B2B export UVG -8.4%; management confident contracts are in place, some alternate sourcing possible

FY26 guidance held. Q1 26.6% OPM flagged as temporary; management expects moderation from inventory benefit (~100 bps) and potential rebates if VAM volatility persists.

Prior call (Q4 FY26) noted 15% Consumer & Bazaar UVG momentum continuing into Apr–May. Q1 landed at 12.2%, suggesting moderation; management now guides double-digit (9–10% normalized) medium-term, not the prior high-single-digit acceleration tone.

New risk: South Indian cement company entering tile adhesives with 'ambitious targets'. Pidilite maintains tile adhesive penetration only 25–30% (large TAM but now contested) and growth 1.5x–2x market (market-share accretive but with new players).

B2B export UVG –8.4% in Q1; management confident in recovery but timeline unclear. Prior call did not foreground this near-term headwind as explicitly.

Roff, Dr. Fixit, projects at 2x–4x growth ranges; waterproofing now mid-teens+ (vs low single-digit prior); new innovations (X-PER anti-bending, M-Seal washable, Nio Pro) showing traction. Management confidence on pioneer execution higher.

As situation normalizes, exports will return; most contracts are in place, though some alternate arrangements may have been made in interim.

Two business models are equally valid. Our model (procure, ride commodity cycles) has succeeded; backward integration not necessary for cost advantage at our scale. No material impact expected.

Core innovations, not fringe. X-PER solves prevalent door-bending problem; M-Seal Advanced addresses VOC, smell, ease-of-use. Strong long-term potential.

VAM highly volatile ($800→$2,000→$1,370). We take market feedback, give rebates as needed. Pricing proactive, covering cost increase + some margin absorption. Competitive response follows us closely. Win-win philosophy guides.

Over longer period, margins fell into high teens during steep input cost rise. Maintain corridor for operating flexibility given macro risks/uncertainties. No change at this stage.

3-year CAGR ~9%, 2-year ~10%, FY26 full-year ~11%, Q1 12.5% (using standalone C&B metric). Trend is up. Demand holding well; price absorbed, so UVG with pricing in place is good. Similar expected for year.

Category growing, competition expected from cement/tile makers, existing players. Pidilite well-equipped with brand, plant network, cost discipline, quality consistency. Maintaining momentum, accelerating. No material threat.

Three factors: (1) Proactive replacement-cost pricing in phased manner. (2) Some low-cost inventory carryover from prior quarter. (3) Moderation in schemes post-pricing. Q1's 26.4% includes ~100 bps from inventory benefit that will unravel Q2. Look at H1 normalized.

Unlike FMCG, Bazaar products are project-based with fixed budgets. If project ongoing, price rise absorbed. If new, budget recalibrated. Most pricing in by June; no substantial elasticity impact seen. Weighted average price increase modest due to cycles.

Core: steady 1x–2x GDP growth. Growth (Dr. Fixit, Roff, projects): accelerated 2x–4x momentum. Core/growth split ~50–50 going forward. Distribution expanding in both; Roff benefiting from wide plant network, cost discipline, quality consistency building moat.

Green shoots on UnoFin. Architects accepting. Product has 15-year durability + no repainting + sprayable tech unique. Reorganized go-to-market (Pidilite Professional Solutions). Early days; won't comment on ₹100 Cr target yet; focus on building base. Next year, review if momentum sustains.

Behavior is very robust. Quarter had calibrated but multiple price hikes; some channel pre-buying possible but aggregate demand steady. C&B UVG progression right; should continue. Demand holding well.

Balance. Pidilite philosophy is to pioneer. Continuing to look at newer opportunities (electronics, industrial, others). No specifics on call; will talk when ready. Margins and capital to be used for pioneering work.

Prices vary 2–12% by category/brand; some time-weighted. Some lag benefit in Q2/Q3. But VAM/commodity volatility may force rebates. Dynamic, not straightforward. Time-weighted advantage may be nullified by rebates.

Electronics: expanding from consumer electronics to auto/EV. Initial specs coming, commercial pieces emerging, but lag in specs. Paint: seeing something in pockets but not confident on full urban playbook yet. Calibrated approach; will accelerate as confidence builds.

Penetration still only 25–30%; room for all players to grow. We growing fastest (1.5x–2x market growth), gaining share in expanding category. Competition good, keeps us sharp. Multiple levers (plant network, cost, quality, contractor focus, premium products). Market share accretive.

Don't look quarter-to-quarter; Q1 largest quarter, has leverage. If crude stays mid-80s and volatility eases, we can manage well within band, possibly middle-to-higher end. Big if. Q1's 26% is cycle peak due to inventory/pricing timing.

Double-digit UVG endeavor. Index to real GDP growth (6–6.5% assumption). Apply our core growth multiples, you get double-digit UVG. 9–10% reasonable medium-term normalized, inching up over time.

Dr. Fixit most powerful waterproofing brand (retail). Momentum seeing. Multiple solutions (concrete performance, leak prevention). Key: skilled applicator. Training centers, large trained pool. Projects side tapping residential/commercial. Specs-based approach. High double-digit growth now (mid-teens+, vs low single-digit prior). Ecosystem moat building.

Management reaffirmed 20–24% EBITDA margin band and double-digit UVG (9–10% normalized); no revenue number quantified.

Management explicit: ~100 bps from low-cost inventory will unravel Q2, plus expected rebates if commodity volatility persists; margins to normalize into band by H2.

Implied growth capex for tile adhesive, waterproofing, electronics distribution; no budget disclosed.

VAM cost swung $800→$1,370 per MT in Q1 (71% spike). Crude similarly volatile (fluctuating $80–$100 weekly). Pidilite's margin band has 400 bps width but each 200 bps move in VAM could swing EBITDA margin by 50–100 bps.

B2B exports UVG –8.4% in Q1 due to geopolitical issues in key markets (unnamed). Exports material to B2B business; timeline for normalization unclear.

Tile adhesive (Roff): South Indian cement company entering with ambitious targets; existing multinational/local competition. Waterproofing: multinational and local competitors established. Pentile adhesive penetration only 25–30%, large TAM attracts new entrants.

Q1 EBITDA margin 26.6% includes ~100 bps benefit from low-cost inventory carryover + some scheme moderation. Q2 will see margin reversal as inventory reflects higher input costs purchased + potential rebates if VAM stays low; management explicit margin will 'moderate a little bit' into 20–24% band.

Consumer & Bazaar UVG 12.2% Q1 vs 15% prior quarter; headline growth 22.2% heavily price-driven (~10% weighted price increase). Analyst questioned if 9–10% is new normalized; management holds double-digit ambition but hedging on moderation.